Last Monday, China officially overtook Japan as the world's second largest economy after the US, based on its second-quarter GDP of US$1.33 trillion compared to Japan's $1.28 trillion. This is a first since communist China turned to market-based capitalism about three decades ago.
The Chinese will definitely surpass the Japanese in terms of GDP because their economy is growing at a rate of 8-10 per cent, whereas Japan is stagnant largely because of the lingering effects of deflation that first hit the economy more than a decade ago. In addition, Japan is still recovering from the 2008-2009 global economic crisis.
At this stage, the US remains the world's largest economy, with GDP of around $14 trillion.
US investment bank Goldman Sachs forecast that China, with a population of 1.3 billion, may overtake the US in terms of GDP by 2027.
China is also credited for helping to pull the global economy out of recession last year amid the weakness of the US, the European Union and Japan.
The Chinese economy is today more than 90 times larger than it was in 1978 when its former paramount leader Deng Xiaoping adopted market-based reforms to replace the Communist Party's central-planning mechanisms.
China's unrelenting economic growth last year also turned the country into the world's largest automobile market, replacing the US, and made it the world's largest exporter, replacing Germany, according to Bloomberg.
China is also the world's biggest importer of iron ore and copper, and the second biggest importer of crude oil. China's huge domestic market and gigantic export machinery have also helped boost demand for other Asian economies' exports.
As for Thailand, China was the country's biggest trading partner in the first six months of this year, accounting for 10.9 per cent of Thailand's total international trade. Japan came second, accounting for 10.1 per cent of Thailand's total international trade, followed by Thai-US bilateral trade, accounting for 9.8 per cent.
Bilateral trade between Thailand and the 15-country European Union also accounted for around 9.8 per cent of total international trade.
In fact, Thai-Chinese bilateral trade started to soar markedly about two years ago, largely due to implementation of free trade agreements between Asean and China, and China's massive economic stimulus package.
For example, the Asean-China Free Trade Agreement, which came into effect on January 1 this year, has led to zero import duties on most products, thus helping to boost Thai-Chinese bilateral trade.
In addition, China earlier implemented its massive economic stimulus package in the wake of the 2008 collapse of US investment bank Lehman Brothers, which triggered the US-led global economic crisis. As a result, the Chinese economy continued to grow at a rate of nearly 10 per cent per year, while helping other Asian economies, including Thailand, to avert a deep economic recession.
Bilateral trade aside, Japan, however, remained Thailand's biggest foreign investor in the first half of this year, followed by other Asian, European and US investors, including from Singapore, Taiwan and Korea.
In terms of foreign direct investment in Thailand, China is expected to catch up shortly.